XYZ Company had the following information: Budgeted overhead $75,000 Actual overhead $80,000 Budgeted Direct-labor hours 20,000 Ending
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Question:
XYZ Company had the following information:
Budgeted overhead $75,000
Actual overhead $80,000
Budgeted Direct-labor hours 20,000
Ending balances in the following accounts:
Ending Balance | Actual DLH in Ending Balance | |
Raw Materials Inventory | $ 40,000 | 0 |
Work In Process Inventory | $ 30,000 | 2,100 |
Finished Goods Inventory | $ 60,000 | 8,400 |
Cost of Goods Sold | $210,000 | 10,500 |
- Prepare the journal entry using the adjusted allocation method, ie. prorate the under-or over-allocated manufacturing overhead based on the overhead allocated in the ending balances of WIP, F/G and COGS
- Prepare the journal entry to close the overhead accounts using the proration method, ie., prorate the under- or over-allocated manufacturing overhead based on the ending balances in WIP, F/G and COGS.
- Prepare the journal entry to close the overhead accounts if the balance in (c) is considered immaterial and written off to COGS.
Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
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